An agreement has been reached by Firan Technology Group Corporation (TSX:FTG), a top supplier of electronic goods and avionic sub-systems for the aerospace and defence markets, to purchase Holaday Circuits, Inc. Minnetonka, Minnesota, a suburb of Minneapolis, is where Holaday is headquartered. A producer of advanced circuit boards with an emphasis on the aerospace and defence industries is Holaday. The approval of the Committee on Foreign Investment in the United States (CFIUS) and other usual closing requirements are prerequisites for the acquisition's closure. The businesses will soon submit an application to CFIUS. The deal is anticipated to be finalised in the first quarter of 2023.
Subject to customary closing adjustments, FTG will pay approximately $24M CAD in cash consideration to acquire 100% of Holaday. Additionally, based on future performance, there is an earn out provision of up to $6M CAD. Prior to the pandemic, Holaday's audited financial accounts showed yearly sales of over $40M CAD, which fell to $30M during the epidemic.
In connection with the sale, Holaday received legal and financial advice from Messerli Kramer and Wipfli Corporate Finance Advisors, LLC, respectively.
“FTG had identified Holaday as an ideal fit with our product and market focus. This acquisition, if completed, will complement FTG’s existing facilities, add new customers and expand our market share in the Aerospace and Defense market,” stated Brad Bourne, President and CEO, FTG Corporation. He added, “The team at Holaday has built a great business with a strong reputation in the industry for quality products and excellent operational performance and we are excited to have them as part of FTG. We intend to continue to operate the business in its current facility.”
Dennis Pulanco, Holaday’s Executive Vice President, commented, “With the passing of Marshall Lewis, my business partner for 40 years, it was time for an ownership change at Holaday. It was important to us that a new owner be aligned with our values, and I am pleased with the sale of Holaday to FTG, as I believe FTG will continue to build the business going forward to the benefit of Holaday’s customers, employees and other stakeholders.”
Additionally, FTG reports that it has signed a sale/leaseback contract for the California site in Chatsworth that it earlier this year bought. Due diligence must be completed, among other closing requirements, before the closing can take place. The transaction is anticipated to close in the first quarter of 2023, with proceeds of about $8.5 million Canadian dollars (CAD), less commissions and other costs. The first lease term will last until 2029, and there will be two additional five-year extension options.
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